Ericsson (NASDAQ: ERIC) has published the latest findings from its ‘Sector in Focus: Connecting Retail’ report, which explores the challenges retailers currently face and how connectivity solutions can help address them. The report found that 48% of retailers cited networking and IT as the biggest frustration, ahead of budget (40%) and staffing issues (32%) when launching new technology-based services in stores.
According to the survey conducted by Censuswide, 52% of technology decision-makers at retailers believe technology issues are their biggest blockers to creating resilient retail branch networks. 70% believe fixed broadband is a blocker to creating a standardised in-store service, likely due to the physical fragility of fibre cables leading to network outages or lack of fibre in some areas of the UK. The need for specialist equipment to install cables can make it complex to upgrade connectivity as requirements evolve. As a result of these issues, over a third (37%) of large retailers are forced to offer scaled-down services at more remote locations, and nearly two-fifths (39%) notice varying levels of customer experience, leading to 38% experiencing a loss of revenue.
Technology is enhancing customer experience and security
Retailers are relying on connectivity to enhance customer experience, with 72% offering in-store Wi-Fi and 57% using it for personalised marketing. Additionally, 60% have adopted IoT for digital signage for real-time offers and over half (55%) have used AI and machine learning to support dynamic pricing. For example, T-Mobile needed 100% uptime at its 5,000+ stores to support digital signs and payment systems. However, adding more wires to thousands of stores was not cost effective, so they turned to their own cellular broadband network and Ericsson Cradlepoint cellular adaptors to provide failover support, keeping critical application and IoT devices online 24/7.
At the same time, retailers are trying to protect their employees and stock from criminals. However, despite stores in the UK investing £1.8 billion in security measures such as CCTV in 2024, customer theft still hit £2.2 billion, nearly three times the level of 2020. the UK, only half (50%) of retailers have invested in enhanced asset management or inventory control tools, and just 54% have adopted IoT tools to support asset tagging and tracking. If companies are to increase their deployment of these measures, and ensure their effectiveness, they must have the right connectivity infrastructure in place to allow real-time data sharing.
Looking to the future
Retailers must focus on the future to stay competitive, resilient and adaptable in an evolving market. AI adoption is rising, with 49% of retailers already using AI chatbots, which can help reduce the workload on human workers and allow them to focus on higher-value tasks. Likewise, 39% deploy AI to inform dynamic pricing, which can help boost revenues, and 29% are currently testing additional use cases across the business. However, to effectively support this next generation technology requires a reliable, robust, and secure network.
As these networks expand, ensuring secure bandwidth and low latency is critical. Cloud-based tools and secure connectivity solutions are essential to sustaining performance without putting pressure on IT teams.
Paul McHugh, area drector UK at Ericsson Enterprise Wireless Solutions, stated: “Retailers are operating under vast amounts of pressure as they face higher tax bills, reduced customer spending and rising safety issues. While many see the use of technology like AI and IoT as a way of overcoming these challenges, it is clear that out-of-date connectivity infrastructure is leaving them hamstrung. Wired connectivity, like fibre, does not provide the necessary flexibility or resilience needed to support a universal customer experience across all store locations. Cellular networks are the answer. They can supply secure and reliable connectivity from day one with the necessary bandwidth and low latency to support new in-store technology. Good connectivity is no longer optional – it’s essential to stay alive and ensure success in a technological-first world”.
